In a SOC 2® engagement, management asserts that they use a subservice organization for data center hosting. Management's description of the system excludes the controls performed by the data center. Which method of reporting is being used?

Answer options:

Inclusive method

Carve-out method

Type I method

Integrated method

How to approach this question

Distinguish between 'carve-out' (excluded) and 'inclusive' (included).

Full Answer

B.Carve-out method✓ Correct

The carve-out method is used when the service organization's description excludes the subservice organization's controls. The auditor relies on the subservice organization's own SOC report (if available) or simply notes the exclusion.

Common mistakes

Confusing Inclusive and Carve-out.

Question 07 All questions Question 09

Practice the full CPA ISC Practice Exam 2

82 questions · hints · full answers · grading

More questions from this exam

Q01A service organization provides a cloud-based payroll platform where clients access the software ...Medium Q02An auditor is reviewing the backup strategy for a financial institution that requires a Recovery ...Hard Q03During a walkthrough of the change management process, an auditor observes that developers have w...Medium Q04An auditor is reviewing a SQL query used to generate a list of active customers for a marketing c...Hard Q05Which of the following entities is considered a 'Covered Entity' under the HIPAA Privacy Rule?Medium

View all 82 questions →